Whether or not Palin can get elected will have a lot to do with how pissed off people are with Obama by 2010.
It was said about Reagan that he was too conservative, too outside the mainstream to get elected. All of which usually would have been true. I can't see him having got elected in 1968, 1972 or 1976. But by 1980 people were so fed up with Carter the Republicans could have nominated a lamp post and still handily won.
Of course, whether it's to the Republican's advantage to win the presidency in 2012 is a whole 'nother question. By the end of that president's term, a lot of entitlement spending is going to come due for retiring boomers, and likely by then the Chinese will have cut up our credit card. There are problems that won't go away no matter who's in power. And whoever is in power is going to carry the can for it, fairly or not.
It might very well be a good idea for the Republicans to sit this one out, and leave the Democrats holding the bag for the collapse. My take is that they have nothing to lose by nominating the lady moose hunter. Politicians have overcome bigger obstacles than blowing an interview with Katie Couric. It doesn't matter how much people hate your candidate - as long as they hate the other guy's candidate more.